Weekly Technical Overview: Bitcoin Prepares to Close at $50,000 | Leaves Highs Hopes for 2022

2021/12/27 10:53:20

As we approach the end of 2021, the Bitcoin market seems to be closing at around $50,000. Although the current levels are much lower than the highs set this year, the BTC market is still closing with impressive gains.

There is no doubt that Bitcoin and even altcoins had a roller-coaster ride throughout the year. With a great start to 2021, the crypto continued with an uptrend from the final quarter of 2020. But the game changed with the sellers taking charge in May 2021, which almost completely erased all the gains from the initial three months of the year.

Later, the entire period went into consolidation, as the market tested both highs as well as the lows of the year. Currently, the market trades at $50,000, which is between the range - $60,000 and $30,000.

Bitcoin and 2021 – The Story So Far

The year 2021 has been mostly bullish for Bitcoin, both fundamentally and technically.

On the fundamental front, Bitcoin had about three major drivers that kept the market at higher levels, keeping the prices well above $30,000. For example, in the initial months, Tesla started accepting Bitcoin as payment for its electric vehicles. Furthermore, the company's choice not only increased the price of the underlying asset but also provided crypto whales with another reason to buy their product. Musk, however, discontinued the BTC payments option after gaining the hearts of crypto fans.

One of the most important stories of the year, which dominated the news, revealed the potential of Bitcoin. El Salvador accepted the digital asset and now has it in its treasury as well. It's astonishing that a little American country made history by recognizing Bitcoin as legal cash. Finally, ProShares was the first company to get approval from the Securities and Exchange Commission (SEC) to launch Bitcoin ETF products. Under the symbol BITO, the financial instrument began trading on the New York Stock Exchange.

On the technical front, the Bitcoin market is ending on a green note, as its close price is much higher than the open price. The Bitcoin market opened at around $36,000 at the beginning of 2021 and is preparing to close around $50,000.

BTC Miner Reserves Inches to Yearly Highs

The miner reserves indication shows the overall number of Bitcoins presently held in all miners' wallets. When the value of this statistic falls, it indicates that miners have begun to transmit their coins to other locations, most commonly exchanges. If this pattern continues, it might indicate that miners have begun to sell their crypto. This might have a negative impact on the price of Bitcoin. When the reserve's value grows, on the other hand, it might indicate that miners are stockpiling coins in their wallets. Therefore, this is a positive trend for BTC.

On-chain data shows that BTC miners have been accumulating for quite some time, with their reserves just breaking the 2021 high established around 6 months ago. While there were periodic periods of distribution for miners throughout this time, the overall tendency was among accumulation. This pattern might indicate that miners are positive on BTC right now since they now own more coins than they did when the cryptocurrency hit an all-time high of $69,000.

And due to supply-demand factors, this shift in miners' roles from distributors to accumulators may increase Bitcoin's scarcity, benefiting the cryptocurrency's price.

Bitcoin Under Pressure as New Whale Takes an Entry

After reaching $51,600, the pair began to retrace, resulting in a drop to $49,600. Bitcoin was back above $50,000 at the time of publication.The move coincided with a surge in inflows to a popular crypto exchange, with orderbook data indicating a fresh barrier of resistance at $50,000.

Bitcoin Leaves High Expectations for 2022

As we approach the new year, the expectations on Bitcoin from its speculators have taken a huge leap. After setting two new highs this year, and the price still holding ground in the bullish territory, the technical market participants are highly bullish on Bitcoin for the upcoming year.

Bitcoin (BTC) Price Analysis

The higher timeframe picture of Bitcoin usually remains bullish, for the most part. Although it has retracements of 20-30% once in a while, the recovery from the buyers puts it back in the bullish market.

After setting an all-time high at $69,000, the market dipped for a retracement, bringing the prices down to $50,000. And based on the current price action (last four candles), it certainly looks like that the market is beginning to transit to the upside.

Bitcoin Price Chart on the Weekly Timeframe | Source: BTC/USDT

If the market does hold at the current level, and there are at least a couple of bullish candles (above $50,000), it is a no-brainer for the market to continue north and process to make new ATHs.

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